Dramatic Tricare Drug Cost Hike Advances in Congress

Tricare pharmacy co-pays for most drugs will go up in 2018 due to a measure expected to be approved by lawmakers.

The measure, approved by the Senate early this year, is included in the final version of the annual Defense Authorization Act (NDAA), congressional staff said Wednesday at a briefing with reporters.

Over the next 12 years, the measure would steadily increase co-pays for most drugs through retail pharmacies, while adding new fees to those received by mail.

Drugs received at military pharmacies will continue to be free.

Currently, non-active-duty Tricare users under 65 pay nothing for 90-day supplies of generic drugs received through the system's home delivery service, Express Scripts, and $20 for a 90-day supply of an approved brand-name drug. Prescriptions filled at an in-network retail pharmacy carry a cost of $10 for a 30-day supply of a generic drug or $24 for a 30-day supply of a brand-name drug.

Starting in 2018, all drugs will come with a fee. Generics received by mail will cost $10 for a 90-day supply, while the cost of a 90-day supply of a brand-name drug will increase to $28. Generic drugs received at in-network retail pharmacies will carry the same cost of $10 for a 30-day supply for now, but the cost of brand-name drugs will increase to $28.

All drug costs will see a steady increase between now and 2026, with fees for a 30-day supply of a generic at a retail pharmacy and a 90-day supply by mail reaching $14, and a 30-day supply of a non-generic at a retail pharmacy or a 90-day supply by mail hitting $45.

Officials said early this year that drug cost increases would save the Defense Department $2.1 billion by 2022.

Lawmakers chose to use that savings in part to fund a permanent fix to a measure known as the "widow's tax." That measure penalizes surviving spouses who qualify for both the Survivors Benefit Plan (SBP) and Dependency and Indemnity Compensation (DIC) from the Department of Veterans Affairs by requiring one payment to be offset by the other.

The offset fix currently in place, known as the Special Survivor Indemnity Allowance (SSIA), was set to expire next year. Lawmakers opted to make both payments permanent, covering the cost of doing so through the Tricare pharmacy fee increase.

Lawmakers also rejected through the legislation a plan to increase Tricare fees for current working-age military retirees or those who will retire from the current force.

A measure passed last year approved higher fees for those who join after Jan. 1, 2018, but gave protection to current retirees and troops through a "grandfathering" clause. The Senate had proposed removing that protection and instead pushing all retirees into the new pay structure, a move that would save $3.6 billion in just the first five years.

That change is not included in the final version, according to Hill staff.

Before the measures become law, they must first be voted on by the full House and Senate and signed by the president.